This information paper presents the results of an investigation into the spending patterns of the pensioner and other government beneficiary households and discusses how these spending patterns could be better represented in the Pensioner and Beneficiary Living Cost Index (PBLCI). The investigation is based on detailed expenditure information taken from the 2009-10 Household Expenditure Survey (HES).

Based on the detailed HES data, the spending patterns of pensioner and other government beneficiary households were found to be statistically significantly different from those of the general Consumer Price Index (CPI) sample population within 52 of the 85 expenditure classes represented in the PBLCI. These differences translated into statistically significant differences in the price movements experienced by the two sample populations in 24 of the 85 expenditure classes.

The more detailed HES data has been incorporated into an experimental PBLCI and an analysis of the impact on the headline 'all-groups PBLCI' quarterly and annual percentage change figures and the all-groups PBLCI index level is presented in the 'Results' section of this paper. During the five year period (March 2006 to March 2011) covered by the analysis, the impact on the percentage changes fluctuated between minor positive and minor negative effects. The effect on the index level was a marginal upward trend.

In addition to the main findings, the investigation identified seven items including 'home help' and 'money order charges' not currently represented in the PBLCI/CPI basket of goods and services which, based on their level of expenditure, could be considered for inclusion in the PBLCI. The investigation also identified retail outlets preferred by pensioner and other government beneficiary households that are not currently included in the CPI.

The results suggest that the quality of the PBLCI could be improved if the weights applied within particular expenditure classes were derived from expenditure specific to pensioner and other government beneficiary households, and by including new items and outlets in the price sample collected for the PBLCI.

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